Institute of Medicine report points to backwards structure of health care industry

By Chelsea Conaboy, Globe Staff

A new report released Thursday by the Institute of Medicine delves into the somewhat paradoxical challenge of the health care industry: how to lower cost while improving the health of all Americans.

The report, called “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America,” hits on many common themes of today’s health care debate.

Health care quality and safety fall “substantially short of their potential,” the report says, and there are major disparities in how different populations across America are treated. The biggest driver of overspending in the US system is unnecessary care, including overuse of high-cost services, totalling about $210 billion in 2009. Today’s approach to paying hospitals and doctors for each test or treatment “encourages wasteful and ineffective care,” the report says.

Technology and evidence-based process improvements that have been successful in other industries are important tools for making health care better, the authors write. Also essential is making patients into smarter consumers.

Among the highlights is this summary of just how different health care is from other industries:

- If banking were like health care, automated teller machine (ATM) transactions would take not seconds but perhaps days or longer as a result of unavailable or misplaced records.

- If home building were like health care, carpenters, electricians, and plumbers each would work with different blueprints, with very little coordination.

- If shopping were like health care, product prices would not be posted, and the price charged would vary widely within the same store, depending on the source of payment.

- If automobile manufacturing were like health care, warranties for cars that require manufacturers to pay for defects would not exist. As a result, few factories would seek to monitor and improve production line performance and product quality.

- If airline travel were like health care, each pilot would be free to design his or her own preflight safety check, or not to perform one at all.

Chelsea Conaboy can be reached at cconaboy@boston.com. Follow her on Twitter @cconaboy.